May 30, 2023

Today, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued a Memorandum seeking cases on overbroad non-compete agreements that she deems unlawful under the NLRA because they interfere with employees ability to: (1) concertedly threaten to resign to secure better working conditions; (2) carry out concerted threats to resign or otherwise concertedly resign to secure improved working conditions; (3) concertedly seek or accept employment with a local competitor to obtain better working conditions; (4) solicit their co-workers to go work for a local competitor as part of a broader course of protected concerted activity; and (5) seek employment, at least in part, to specifically engage in protected activity, including union organizing, with other workers at an employer’s workplace.

The memorandum goes on to explain that non-competes could be lawful if the provisions clearly restrict only individuals’ managerial or ownership interests in a competing business, or true independent-contractor relationships. It also states there may be “special circumstances” in which a narrowly tailored non-compete agreement’s infringement on employee rights may be justified. 

The memorandum commits the NLRB to an “interagency approach to restrictions on the exercise of employee rights, including limits to workers’ job mobility, including information sharing and referrals to other agencies,” specifically noting the NLRB’s recent memoranda of understanding with the Federal Trade Commission and the Department of Justice’s Antitrust Division, which are making their own effort to address the unlawful anticompetitive in the labor market. This comes as the Federal Trade Commission is working to finalize its proposed rule banning non-competes because they violate federal antitrust/competition laws that agency enforces.

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